FDI inflows increased during President Mahinda Rajapaksa's tenure - Minister LakshmanYapa Abeywardena

By Uditha Kumarasinghe

Investment Promotion Minister LakshmanYapa Abeywardena said the total number of Foreign Direct Investments(FDIs) gained by Sri Lanka from 1978 up to 2005 was US$ 3 billion.However, US$ 8 billion worth FDI inflows have come in during President Mahinda Rajapaksa's tenure from 2005 to 2013 which is a 74 percent increase in FDIs.

The Minister in an interview with the Sunday Observer said when we look at the past, all former governments expressed confidence over Europe as they thought the world was under Europe. It is only President Mahinda Rajapaksa who emphasised to the Asian countries that this was not so and as a result the country has gained tangible benefits.

The Minister said nearly 35 percent of the world's FDIs were coming in from developing countries. At present investments were largely made in Asian countries. That is why, the Government is promoting investment with Asian countries.

However, the Opposition is misleading the people and obstructing investment from flowing into the country. They know this Government cannot be defeated at village level as it has developed infrastructure facilities in villages and the President has a close rapport with the people. The Government has equally developed villages and towns.

The UNP is aware that only by disrupting the country's economic growth the Government can be weakened. That is why UNP economists are attempting to mislead the people and were obstructing the inflow of FDIs.

Q: What are the key economic benefits to Sri Lanka from the Chinese President's visit?

A: The construction of the Colombo Port City is one of the biggest investments that we gained from China.If China didn't make this investment, we would have never turned this offshore city into a reality. This project was one of our dreams.

Because US$ 1.3 billion investment comes from China without any land being given by us. A misconception has been created among the public that the Government has given land to China. I would like to ask where is this land? There is no such land as claimed by the Opposition.

The Government has given 273 hectares in the sea off Galle Face Green to China to reclaim and construct this Port City. Of that, the total extent of land area in the sea, 20 acres will be given to China as an outright grant while the other land area will be given based on leasing terms.

The Government decided to give 20 acres on an outright basis to build confidence as this is a historic project launched in Sri Lanka. China has not implemented this kind of project in any other country.

A Chinese President visited Sri Lanka after a lapse of 28 years. This Port City project would be the biggest project implemented in Sri Lanka and it would help to increase the inflow of FDIs in the next few years. China has laid the foundation to commence the construction of that mega project.

China has also extended its support to implement the second phase of the Norochcholai Project.Continuous breakdowns in the Norochcholai coal power plant was another problem that was encountered. Those who constructed this project are aware of the defects.A technical agreement will be signed where China will offer us technical assistance and technology to repair the power plant.

It will also make billions worth of investment to commence the next phase of the Hambantota Port. This would be a golden opportunity. When the US share market collapsed, it was China who helped them on two occasions. As US economic experts predict, China would be the world's biggest economic power in the next 40 years.

President Mahinda Rajapaksa is lucky to attract this huge Chinese investment to Sri Lanka.

China, is the only country which has economic capability to give strength to our investments.Now we have obtained that facility.

Q: Nearly 20 agreements were signed during the Chinese President's visit, forging closer ties in the political, economic, cultural and social arena. Would you like to explain?

A: Those agreements were based on socio, economic, political, cultural and agricultural aspects. As an Asian country which possesses a laudable history, if we can exchange our cultural values between two countries, it would be important at this stage. Some of these agreements reached are vital for social development and welfare. the political aspect is yet another advantage gained from these agreements.

They were signed preserving our political identity.Nobody can say that we have surrendered to China. We get assistance from every country. We have obtained assistance from Japan as well.

According to the 'Mahinda Chinthana' , Sri Lanka is not alligned to any country. Under the 'Mahinda Chinthana', we will move forward based on our own cultural identity.

We signed these agreements without any harm to that cultural bond.

We should go for an eight percent economic growth by 2016. To reach this target, we should have US$ 5billion worth FDI inflow. Our FDI inflow is US$ 1.3 billion. It is difficult to reach this target without attracting this kind of huge investment from China.

The Port City project would be a boost to reach the target of US$ 5 billion FDIs by2016. The investment made for the machinery of the second phase of the Hambantota Port development project will also bring billions worth FDIs to Sri Lanka. The total number of FDIs gained by Sri Lanka from1978 up to 2005 was US$ 3 billion. However, US$ 8 billion worth FDIs were attracted during President Mahinda Rajapaksa's tenure from 2005 to 2013.

There is a 74 percent increase of the FDI inflow during President Mahinda Rajapaksa's time. The FDIs obtained by the Investment Promotion Ministry has also shown 51 percent increase in June this year compared to the figures of June last year.

The Ministry has attracted US$ 921 million FDIs by the end of August this year compared to US$ 540 million FDIs gained during the corresponding period last year. The decision made by some countries to make their investments in Sri Lanka has led to this huge FDI inflow.

Q: How do you analyse the visits made by prominent world leaders to Sri Lanka during President Mahinda Rajapaksa's tenure?

A: If you look at the past, all former governments were confident about Europe. They thought the whole world s handled by Europe. It is only President Mahinda Rajapaksa who looked at the emerging Asian countries,so the country has benefitted. Nearly 35 percent of the FDIs in the world comes from developing countries.

At present investments are largely made in Asian countries. That is why, we are also promoting our investments with Asian countries. We could sign Free Trade Agreements (FTA) with Japan and China.

We have already signed FTAs with India and Pakistan.As I said earlier, Sri Lanka should achieve 8 percent economic growth by 2016. This economic growth should be achieved to get productive results from the investments that we have made on infrastructure.

This growth cannot be maintained without bringing US$ 5billion FDI inflow to the country. My target is to attract US$ 2billion FDIs this year.

If we take Vietnam as an example, in1990, both countries were at equal position on exports. At that time, the total value of export earnings of the two countries was US$ 2000million. At present, Vietnam makes an exports worth over US$ 130billion compared with US$ 10 billion exports made by Sri Lanka.

Vietnams's FDI inflow has increased ten fold compared with our FDIs. The key reason is that Vietnam has signed FTAs with 28countries. But our Opposition is misleading the people and obstructing investment from flowing into the country.

They deliberately do that. There are a few economists in the UNP who know that this Government cannot be defeated at village level as it has developed the infrastructure facilities in villages and the President has a close rapport with the people. The Government has equally developed villages and towns. Therefore, the UNP knows that by disrupting economic growth is the only way to attack the Government. If we cannot achieve 8 percent economic growth by2016, whatever Government is in power will not face these problems. But our Government has the ability to reach this target.That is why the UNP economists are attempting to mislead the people and are obstructing to the inflow of FDIs.

Q: What are the plans drawn up by your Ministry to ensure FDI inflows?

A: We follow several strategies to reach our targets. We have signed two agreements with two Japanese banks to commence an exchange program between the business community of two countries.

Nearly 25 million leading Japanese businessmen are dealing with one of these banks. We would commence an exchange program with big businessmen who have dealings with this bank.

We intend to carry out investment promotion through them. We would also sign an agreement with Exim Bank of China to commence the same business exchange program to promote investments. We have also laid emphasis on some European countries such as Germany.

Q: Certain sections of the media reported that the Government was going to transfer the Norochcholai power plant to China. Is there any truth in this?

A: I categorically deny that. The MoU on the Norochcholai power plant has already been released. That MoU was signed after held discussions with trade unions. It has also been discussed with the engineers of the Ceylon Electricity Board (CEB).

Usually, the MoU is formulated by the Ministry after a consensus is reached at a discussion attended by the CEB Chairman, engineers and trade union. Actually, Norochcholai was the first coal power plant set up in Sri Lanka.

When it resumes operations,certain shortcomings and breakdowns may occur. According to the MoU signed between two Governments, the Chinese Government will extend their support to conduct operations of this power plant in a more productive manner.

However, China would not interfere regarding the maintenance or operation of this power plant as claimed by certain sections of the media. China would also extend itsr support to purchase necessary equipment for the plant.

Q: The on-going investigation on Sri Lanka by the office of the High Commissioner for Human Rights has also been backed by Pillay's successor Prince Zeid Al-Hussein. Would this investigation have an adverse impact on Sri Lanka?

A: Actually this is a pre-planned investigation. This is an injustice made on a country. Even if they conduct that investigation, the Government's position remains unchanged. What we have done is only the eradication of LTTE terrorism from Sri Lankan soil.

But the UNHRC turns a deaf ear to grave human rights violations taking place in the Gaza strip, Syria, Libya, Afghanistan, Iraq or the recent incidents in the UK. I think Europe has also realised the seriousness of the threat of terrorism.

President Mahinda Rajapaksa didn't succumb to the pressure exerted by the West and the NGOs. As a Leader who loves his motherland, the President rejected to implement the agenda proposed by the West. We had to face these repercussions as we defeated terrorism through a homegrown strategy without being subjected to the pressure of the West.

Q: Do you hope for a landslide victory for the Government at the Uva PC elections this time as the UNP has fielded a vibrant chief ministerial candidate?

A: The outcome of election results would show that no change will be made in Uva. It is obvious that the majority of the people of Uva are with the Government.Therefore, the Government has no fear about Uva PC election. The Government will capture power in the Uva Provincial Council on September 21 with a comfortable majority.

Q: The Opposition attempted to portray a violence-hit election atmosphere in Uva especially in the Moneragala district. Would you like to comment on this?

A: A large number UPFA campaign offices were attacked and destroyed by armed gangs. The Police has been given powers to deal strictly with those who violate election laws. Therefore it is up to the Police to implement the law.

Q: How do you describe the recurrent political crisis in the hierarchy of the UNP? Will the Uva election results cause further dissension in the party preventing any unity among them?

A: The UNP will further collapse after the Uva PC elections. UNP leaders will never unite. The UNP will not gain the expected results at the Uva PC election. I see this election as yet another electoral defeat faced by the UNP.

Q: Is there any truth in media speculations that the Government is planning early elections,possibly in January next year?

A: Most probably, it would happen. That election will be held on an appropriate date to be fixed by the President.

Most probably, there will be an election in January next year. I would state with responsibility that a Presidential Election will be held first.

Q: Various interpretations have been made on the legality of the President contesting the third term. What is the actual position?

A: According to the amendments made to the Constitution, the President can contest more than two terms. There is no provision in the Constitution to prevent a President who has completed two terms of office to contest for a third term.

Without a legal argument, this is a political story projected to create fear among the majority of the people who extended their support to the President, that he cannot contest for a third term.

By doing so, certain sections may attempt to distort the mindset of the people with the intention of bringing a weak candidate into power.

This misconception will be debunked after nominations are given. Laws are formulated by Parliament which represents the people.

The people will be asked whether they would like to elect President Mahinda Rajapaksa fora third term or not.

We have to analyse which is important, the verdict given by the people or this baseless legal argument. The people would respond when nominations are given. There is no doubt that President Mahinda Rajapaksa would come into power for a third time as well.

Q: Sections of the civil society,professionals and other influential sections have underlined the needof a new constitution. Your views?

A: If not for the Executive Presidency, we would have not been able to end the war against terrorists. If the Constitution is to be changed, all political parties should join hands and discuss it.

It was the UNP which introduced this Executive Presidency and has now joined with those who are clamoring to abolish it. The UNP which is the pioneer of the Executive Presidency gave maximum powers through the Constitution.

The others who also demand to abolish it have helped the President during elections.

Those who demand to abolish the Executive Presidency are aware that they cannot defeat President Mahinda Rajapaksa. Their contention is that if the Constitution is changed and a new system is introduced without going for a Presidential Election, there would be some advantage to them. My view about the Executive Presidency is that all political parties should reach a consensus to reduce its powers.It should not be changed to cater to the personal interest of some people.